Heat olive oil and butter in large pot over medium heat. Add onions, garlic and green pepper and cook, stirring occasionally, until tender and just starting to brown, about 15 minutes. (Turn heat to medium-low if mixture is browning too quickly.)

Add cut corn tortillas, chili powder and cumin; continue to cook, stirring occasionally, a few minutes more. Add chicken stock, salt and cayenne pepper and bring to a boil. Turn heat down to low and simmer with lid slightly ajar for about 20 minutes. Off heat, use hand-held blender to puree until completely smooth (you can also do this in a blender in batches; just be careful to open the steam hole and cover with kitchen towel to avoid splatters). Stir in chicken if using, then ladle soup into bowls and garnish as you like.